`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549




                                    FORM 10-Q

(Mark one)
/X/       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
          SECURITIES EXCHANGE ACT OF 1934
          For the quarterly period ended March 31, 2001

                                       or
/ /       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
          SECURITIES EXCHANGE ACT OF 1934
          For the transition period from ______________ to _______________

                         Commission File Number 0-19824
                                                -------

                      Nutrition Management Services Company
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

      Pennsylvania                                                 23-2095332
--------------------------------------------------------------------------------
(State or other jurisdiction of incorporation )                 (I.R.S. Employer
or organization                                              Identification No.)

      Box 725, Kimberton Road, Kimberton, PA                               19442h
--------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)

Registrant's telephone number, including area code                (610) 935-2050
                                                   -----------------------------
                                                                             N/A
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if change since last report.

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  report),  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days  Yes X ____ No ____.

2,747,000  Shares of Registrant's  Class A Common Stock,  with no par value, and
100,000  shares of  Registrant's  Class B Common Stock,  with no par value,  are
outstanding as of May 9, 2001.







                                TABLE OF CONTENTS


Part I.     Financial Information                                       Page No.
            ---------------------                                       --------

            Consolidated Balance Sheets of
            March 31, 2001 (unaudited) and June 30, 2000                     2-3

            Consolidated Statements of Operations for the Three and Nine
            Months Ended March 31, 2001 and 2000
            (unaudited)                                                      4

            Consolidated Statements of Cash Flows for the
            Nine Months Ended March 31, 2001
            and 2000 (unaudited)                                             5

            Notes to Financial Statements                                    6-7

            Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                       8-10

Part II.    Other Information                                                 11

            Signatures                                                        12




                                      - 1 -





                      NUTRITION MANAGEMENT SERVICES COMPANY

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS


                                                         March 31,      June 30,
                                                             2001          2000
                                                         --------       --------
                                                        (unaudited)

Current assets:
  Cash and cash equivalents                               $445,953    $1,134,720
  Accounts receivable, net of allowance for doubtful
  accounts of $1,334,390  and $853,005, respectively     7,275,391     6,837,269
  Unbilled Revenue                                         313,958       595,228
  Deferred income taxes                                    534,022       534,022
  Inventory                                                251,923       227,379
  Prepaid and other                                        464,991       460,903
                                                         ---------     ---------

Total current assets                                     9,286,238     9,789,521
                                                         ---------     ---------

Property and equipment, net                              9,280,901     9,570,651
                                                         ---------     ---------

Construction in Progress                                    28,410        12,810
                                                         ---------     ---------

Other assets:
  Advances to employees                                    325,825       302,221
  Deferred income taxes                                    242,503       242,503
  Bond issue costs                                         282,222       239,128
  Deferred costs and other assets                           10,021        10,020
                                                         ---------     ---------

Total other assets                                         860,571       793,872
                                                         ----------     ---------

                                                       $19,456,120   $20,166,854
                                                       ===========   ===========

            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                     - 2 -



                      NUTRITION MANAGEMENT SERVICES COMPANY

                           CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY


                                                                                March 31,             June 30,
                                                                                    2001                  2000
                                                                                ---------             --------
                                                                                (unaudited)

Current liabilities:
     Current portion of long-term debt                                        $   120,000           $  174,000
     Accounts payable                                                           4,842,007            3,970,660
     Accrued expenses                                                             594,293              541,346
     Accrued payroll and related expenses                                         390,886              350,547
     Accrued professional                                                          10,304               48,450
     Accrued income taxes                                                         121,098               18,466
     Other                                                                        142,081              131,953
                                                                                ---------           ----------

Total current liabilities                                                       6,220,669            5,235,422
                                                                                ---------           ----------


Long-Term liabilities:
    Long-term debt, net of current portion                                      5,403,391            6,598,668
    Long Term Note Payable                                                      1,151,375            1,404,116
    Other                                                                           6,641               26,414
                                                                                ---------           ----------

Total long-term liabilities                                                     6,561,407            8,029,198
                                                                                ---------           ----------

Stockholders' equity:

    Undesignated preferred stock - no par, 2,000,000 shares authorized, none
            issued or outstanding                                                    ----                 ----

     Common stock:
     Class A - no par, 10,000,000 shares authorized; 3,000,000 issued and
           2,747,000 outstanding                                                3,801,926            3,801,926
     Class B - no par, 100,000 shares authorized, issued and outstanding               48                   48
     Retained earnings                                                          3,371,633            3,599,823
                                                                                ---------            ---------
                                                                                7,173,607            7,401,797



     Less:  treasury stock (Class A common: 253,000 shares) - at cost            (499,563)            (499,563)
                                                                                ---------          ------------
Total stockholders' equity                                                      6,674,044            6,902,234
                                                                                ---------            ---------

                                                                              $19,456,120          $20,166,854
                                                                              ===========          ===========



            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                      - 3 -





                      NUTRITION MANAGEMENT SERVICES COMPANY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                               Three months ended                    Nine months ended
                                                                   March 31,                                March 31,
                                                            2001              2000               2001           2000
                                                            ----              ----               ----           ----

Food Service Revenue                                     $9,012,310        $9,964,677         $33,419,430   $29,855,588

Cost of operations
     Payroll and related expenses                         3,077,556         3,746,042          10,611,133    11,564,672
     Other costs of operations                            4,269,213         4,192,257          16,863,049    12,351,408
                                                        -----------         ---------         -----------    ----------
          Cost of operations                              7,346,769         7,938,299          27,474,182    23,916,080
                                                        -----------         ---------         -----------    ----------

Gross profit                                              1,665,541         2,026,378           5,945,248     5,939,508
                                                        -----------         ---------         -----------    ----------

Expenses
     General and administrative expenses                  1,476,650         1,473,437           4,684,949     4,649,361
     Depreciation and amortization                          172,310           163,578             507,844       566,954
     Provision for doubtful accounts                        180,000           120,000             540,000       320,000
                                                        -----------         ---------           ---------     ---------
          Expenses                                        1,828,960         1,757,015           5,732,793     5,536,315
                                                        -----------         ---------           ---------     ---------

 Income/(Loss) from operations                             (163,419)          269,363             212,455       403,193
                                                        -----------        ----------           ---------     ---------

Other income (expense)
     Other                                                    6,591             6,591              19,297        22,001
     Interest income                                          6,508            24,224              27,459        64,298
     Interest expense                                      (112,004)         (155,616)           (394,065)     (445,202)
                                                        -----------        ----------           ---------      --------
          Other income (expense) - net                      (98,905)         (124,801)           (347,309)     (358,903)
                                                        -----------        ----------           ---------      --------

Income/(Loss) before income taxes                          (262,324)          144,562            (134,854)       44,290

Provision for income taxes                                   35,001            33,443              93,336        79,393
                                                        -----------        ----------         -----------      --------

Net income/(loss)                                       $  (297,325)       $  111,119          $ (228,190)     $ (35,103)
                                                        ===========        ==========         ===========     ==========

Basic and diluted earnings/(loss)

      - basic and diluted                               $     (0.10)       $     0.04         $     (0.08)     $   (0.01)
                                                        ===========        ===========        ===========     ==========


Weighted average number of shares                         2,847,000         2,847,000           2,847,000      2,847,000
                                                        ===========        ===========        ===========     ==========



            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                      - 4 -




                      NUTRITION MANAGEMENT SERVICES COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                                                                   Nine Months Ended March 31,

                                                                                2001                     2000
                                                                                ----                     ----




Operating activities:
Net loss                                                                    $  (228,190)             $   (35,103)
Adjustments to reconcile net loss to net cash provided by
  operating activities:
     Depreciation and amortization                                              507,844                  536,257
     Provision for bad debts                                                    540,000                  320,000
     Amortization of deferred gain                                              (19,773)                 (19,773)
     Amortization of bond costs                                                  10,924                   10,924
Changes in assets and liabilities:
     Accounts receivable                                                       (978,122)               1,707,364
     Unbilled Revenue                                                           281,270                 (219,380)
     Inventory and other                                                        (24,544)                 (92,351)
     Accounts payable                                                           871,347               (1,016,219)
     Accrued expenses                                                            52,947                  356,803
     Accrued payroll and related expenses                                        40,339                 (216,856)
     Accrued professional                                                       (38,146)                  95,955
     Accrued incomes taxes                                                      102,632                   (2,232)
     Other                                                                      (47,978)                  95,587
Net cash provided by operating activities                                          --                       --
                                                                              1,070,550                1,329,066

Investing activities:
     (Advances)/Repayment to employees                                          (23,605)                  52,553
     Purchase of property and equipment                                        (233,694)                (289,012)
     Deferred costs and other assets                                               --                     13,751
Net cash used in investing activities                                          (257,299)                (222,708)
                                                                            -----------              -----------


Financing activities:

     Repayments of long-term debt                                            (2,642,500)                (283,449)
     Repayments of long-term note payable                                      (252,789)                    --
     Repayments of term loan                                                   (201,866                     --
     Proceeds from term note                                                       --                    225,000
     Proceeds from line of credit                                             1,595,137                     --
                                                                            -----------              -----------
Net cash used in financing activities                                        (1,502,018)                 (58,449)
                                                                            -----------              -----------

Net (decrease)/increase in cash                                                (688,767)               1,047,909
                                                                            -----------              -----------
Cash and cash equivalents - beginning of period                               1,134,720                   43,282

Cash and cash equivalents - end of period                                   $   445,953              $ 1,091,191
                                                                            ===========              ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR:
     Interest                                                               $   369,270              $   439,932
     Income taxes                                                           ($   40,359)             $    60,323


            SEE NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                      - 5 -





                      NUTRITION MANAGEMENT SERVICES COMPANY

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 2001


1.       BASIS OF PRESENTATION

         The  accompanying  unaudited  consolidated  financial  statements  were
         prepared in accordance with generally  accepted  accounting  principles
         for interim  financial  information for quarterly  reports on Form 10-Q
         and,  therefore,  do not include all of the  information  and footnotes
         required by  generally  accepted  accounting  principles  for  complete
         financial statements.  However, all adjustments that, in the opinion of
         management  are  necessary  for  fair  presentation  of  the  financial
         statements,  have been  included.  The  results of  operations  for the
         interim periods presented are not necessarily indicative of the results
         that may be expected  for the entire  fiscal year ending June 30, 2001.
         The financial  information presented should be read in conjunction with
         the Company's financial statements that were filed under Form 10-K.

2.       EARNINGS PER COMMON SHARE

         Earnings  per common  share  amounts are based on the  weighted-average
         number of shares of common stock outstanding  during the three and nine
         month  periods  ending  March 31,  2001 and  2000.  Stock  options  and
         warrants  did not impact  earnings  per share each  period as they were
         anti-dilutive.

3.       REFINANCE OF DEBT

         On February 7, 2001, the Company  entered into a new credit facility of
         a $4,000,000 line of credit at an interest rate of prime or LIBOR + 275
         Basis Points and 30, 60, or 90 day options,  and is collateralized by a
         general  security  interest  in  the  assets  of  Nutrition  Management
         Services  Company and first mortgage on Collegeville  Inn property.  In
         addition,  two  letters  of  credit  were  issued  totaling  $3,136,783
         guaranteeing  the Company's two Industrial  Revenue Bonds. The previous
         lender was paid off as result of this financing.





                                     - 6 -





                      NUTRITION MANAGEMENT SERVICES COMPANY

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                 MARCH 31, 2001



4.       LITIGATION

         On February 7, 2001,  Nutrition  Management Services Company filed suit
         against a major client in the Court of Common Pleas of Chester  County,
         Pennsylvania.  In the lawsuit,  Nutrition  Management  Services Company
         claims that the major customer failed to pay $2.4 million on account of
         services Nutrition Management Services Company rendered,  and that they
         should be required to reimburse  Nutrition  Management Services Company
         for over  $400,000 in start up expenses,  in addition to other  claims.
         During the year ended June 30, 2000 and the nine months ended March 31,
         2001,  the Company  recorded  revenues of  $7,114,407  and  $9,888,568,
         respectively from this major client.

         In addition to the litigation  described  above, the Company is exposed
         to asserted and unasserted  claims.  In the opinion of management,  the
         resolution of these matters will not have a material  adverse effect on
         the Company's financial position, results of operations or cash flows.


                                      - 7 -



           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

        The following discussion and analysis should be read in conjunction with
the financial statements and notes thereto.

RESULTS OF OPERATIONS

        Revenues  for the  quarter  ended  March  31,  2001 were  $9,012,310,  a
decrease of ($952,367)  or 9.56%  compared to  revenues  of  $9,964,677  for the
corresponding quarter last year. This decrease is a result of canceled contracts
during the period offset by growth within existing  contracts.  Revenues for the
nine months ended March 31, 2001 were $33,419,430,  an increase of $3,563,842 or
11.94% compared to revenues of $29,855,588 for the corresponding period in 2000.
This increase is a result of new contracts,  growth within  existing  contracts,
offset by contracts canceled during the period. The Company recorded revenues of
$9,888,568  from a major client  during the nine months ended March 31, 2001 and
accordingly,  the Company  anticipates  that future  revenues will be negatively
impacted by the  termination  of the  relationship  with this major client.  See
"Note 4 to Notes to Unaudited Consolidated Financial Statements."

        Cost of operations for the current quarter were $7,346,769,  compared to
$7,938,299  for similar  expenses  in the same  period last year,  a decrease of
($591,530)  or (7.45%).  This  decrease  is a result of a decrease in  operating
expense due to a decrease in revenues. For the nine month period ended March 31,
2001, cost of operations were $27,474,182, compared to $23,916,080, for the same
period last year, an increase of  $3,558,102 or 14.88%.  This increase is due to
an increases in operating  expenses  associated with an increase in revenues for
the same period.

        Gross Profit for the quarter was $1,665,541,  compared to $2,026,378,  a
decrease of  ($360,837)  or  (17.81%).  This  decrease in gross profit is due to
direct expenses  increasing at a greater  percentage than revenues.  For the nine
month  period  ending  March 31, 2001 gross  profit was  $5,945,248  compared to
$5,939,508, an increase of $5,740.

        General and  administrative  expenses for the quarter were $1,476,650 or
16.38% of revenue,  compared to  $1,473,437  or 14.79% for the same quarter last
year.  This  increase  as a percent of revenue  is a result of the  general  and
administrative expenses remaining constant and a decrease in revenues due to the
loss of a major  customer.  For the nine months ended March 31, 2001 general and
administrative  expenses  were  $4,684,950  or 14.02%  of  revenue  compared  to
$4,649,361 or 15.57% of revenue for the same period last year.  This decrease in
general  and  administrative  expenses  as a percent  of  revenue is a result of
increased  revenues.  General and administrative  expense for the three and nine
months  ended  March 31, 2001  include  $65,969 and  $81,941,  respectively,  of
development   costs  related  to  the  Company's   cook-chill  food  preparation
technology.


                                      - 8 -



        Interest expense for the quarter totaled  $112,004  compared to $155,616
for the same period last year.  For the nine month  period ended March 31, 2001,
interest expense was $394,065 compared to $445,202 in the  corresponding  period
in 2000.  The  decrease  in  interest  expense is a result of the  repayment  of
borrowings as well as a reduction in interest rates.

        Net loss after taxes for the quarter ended March 31, 2001 was ($297,325)
compared to net income of $111,119 for the corresponding  quarter last year. Net
loss per share for the  current  quarter  was ($.10)  compared to net income per
share of $.04 for the corresponding  quarter last year. This decrease in current
quarter net income and earnings per share are primarily the result of a decrease
in gross  profit and an  increase in general  and  administrative  expenses on a
percent of revenue basis due to the loss of a major client.

        Net loss for the nine month period ending March 31, 2001 was  ($228,190)
compared to ($35,103) for the corresponding period last year. Net loss per share
was ($.08) compared to ($.01) for the same period.

LIQUIDITY AND CAPITAL RESOURCES

        At March 31, 2001, the Company had working  capital of  $3,065,569,  and
cash and cash  equivalents  of  $445,953  as  compared  to  working  capital  of
$4,544,099 and cash and cash equivalents of $1,134,720 at June 30, 2000.

        OPERATING  ACTIVITIES.  Cash provided by  operations  for the nine month
period ended March 31, 2001 was  $1,070,550  compared to $1,329,066 for the nine
months ended March 31, 2000. The cash provided by operations for the nine months
ended March 31, 2001 is due to the non cash items and change in accounts payable
offset by an increase in accounts receivable.


        INVESTING ACTIVITIES.  Investing activities consumed $257,299 in cash in
the current period compared to $222,708 in cash consumed in the same period last
year. This use of cash is primarily associated with the purchase of property and
equipment.

        FINANCING  ACTIVITIES.  Current  period  financing  activities  consumed
$1,502,018  in cash  compared to $58,449  provided in the same period last year.
Repayment  of long  term debt  consumed  $3,097,155 in cash  offset by  proceeds
of $1,595,137 during the current period.

        CAPITAL  RESOURCES.  In  February,  2001,  the  Company  refinanced  its
outstanding  indebtedness.  These credit facilities include a $4,000,000 line of
credit and  letters of credit  for  $878,379  and  $2,258,404  guaranteeing  two
industrial  revenue  bond  issues.  The  reason  for the  change  was to  reduce
financing  costs.  As part of the  refinancing,  the Company paid off all of its
obligations to its previous lender.  The new loan agreement requires the Company
to maintain  certain  financial  covenants.  The Company is current with all its
obligations  to its  bank  and on its  bonds  and is in  compliance  with  their
financial convenants.

                                      - 9 -



        A substantial  portion of the Company's  revenues are dependent upon the
payment  of its fees by  customer  healthcare  facilities,  that,  in turn,  are
dependent  upon  third-party  payers  such as state  governments,  Medicare  and
Medicaid. Delays in payment by third-party payers,  particularly state and local
governments, may lead to delays in collection of accounts receivable.

        The  Company  has no  material  commitments  for  capital  expenditures,
including the Collegeville Inn & Conference  Center,  and believes that its cash
from operations, existing balances, and available credit facilities are adequate
for the foreseeable future to satisfy the needs of its operations.




FORWARD LOOKING STATEMENTS

This form 10-Q contains forward-looking statements within the meaning of Section
27A of the  Securities Act of 1933, as amended and Section 21E of the Securities
Exchange  Act of 1934,  as amended,  that are intended to be covered by the safe
harbors  created  thereby.  Investors  are  cautioned  that all  forward-looking
statements  involve risks and uncertainty,  including  without  limitation,  the
adequacy of the Company's cash from operations,  existing balances and available
credit line.  Although the Company believes that the assumptions  underlying the
forward-looking   statements  contained  herein  are  reasonable,   any  of  the
assumptions could be inaccurate,  and therefore,  there can be no assurance that
the  forward-looking  statements  included  in this Form  10-Q will  prove to be
accurate. In light of significant  uncertainties inherent in the forward-looking
statements  included  herein,  the inclusion of such  information  should not be
regarded  as a  representation  by the  Company  or any  other  person  that the
objectives and plans of the Company will be achieved.








                                     - 10 -





                           PART II - OTHER INFORMATION

Item 1.       Legal Proceedings                                   See "Note 4 to
              Unaudited  Consolidated Financial Statements" for a description of
              the Company's litigation.

Item 2.       Changes in Securities                                         None

Item 3.       Defaults Upon Senior Securities                               None

Item 4.       Submission of Matters to a Vote of Security Holders

Item 5.       Other Information                                             None

Item 6.       Exhibits and Reports on Form 8-K

              (a)  Exhibits                                                 None

              (b)  Reports on Form 8-K                                      None




                                     - 11 -





                                   SIGNATURES


        Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company  has  duly  caused  this  report  to be  signed  on  its  behalf  by the
undersigned thereunto duly authorized.



                                           Nutrition Management Services Company

                                           /s/ Joseph V. Roberts
                                           -------------------------------------
                                           Joseph V. Roberts
                                           Chairman and Chief Executive Officer






Date:  May 15, 2001


                                     - 12 -`